TransMedics continues to deliver strong revenue growth. The company is also now profitable, with rapidly increasing earnings.
Medical device ETFs
For investors who want to buy a basket of medical device stocks, there are several medical device ETFs to consider, including iShares U.S. Medical Devices ETF (IHI -0.70%), SPDR S&P Health Care Equipment ETF (XHE -1.00%), and First Trust Indxx Medical Devices ETF (MDEV -0.50%).
1. iShares U.S. Medical Devices ETF
The iShares U.S. Medical Devices ETF is operated by BlackRock (BLK +1.29%). This ETF invests only in U.S. medical device companies. The fund's annual expense ratio is 0.38%.
iShares U.S. Medical Devices ETF owned positions in 49 stocks in late 2025. Its top holdings included Abbott Laboratories, Intuitive Surgical, Boston Scientific (BSX +0.06%), Medtronic (MDT -0.02%), and ResMed (RMD -0.48%).
2. SPDR S&P Health Care Equipment ETF
The SPDR S&P Health Care Equipment ETF is operated by State Street (STT +0.65%). It invests in healthcare equipment and healthcare supplies companies, a group that includes many medical device companies. The ETF's annual expense ratio is 0.35%.
SPDR S&P Health Care Equipment ETF owned positions in 64 stocks in late 2025. Its top holdings included Tandem Diabetes Care (TNDM -3.55%), NovoCure (NVCR -3.25%), TransMedics Group, Medtronic, and Masimo (MASI -4.58%).
3. First Trust Indxx Medical Devices ETF
The First Trust Indxx Medical Devices ETF is operated by First Trust Portfolios. This ETF invests in medical device companies based in both the U.S. and other countries. Its annual expense ratio is 0.70%.
The First Trust Indxx Medical Devices ETF owns positions in 50 stocks as of late 2025. Its top holdings included Wuxi AppTech (WUXI.F -1.53%), Hoya (OTC:HOCP.Y), Smith & Nephew (SNN -0.70%), Agilent Technologies (A +0.47%), and Exact Sciences (EXAS +0.06%).
Should you invest in medical device companies?
As is the case with most investing questions, the best answer about whether you should invest in medical device companies is that it depends. Every investor has different goals, risk tolerances, and time horizons.
One key risk associated with medical device stocks is a decline during economic downturns as healthcare providers reduce their spending. They also face volatility related to government and private payer reimbursement decisions.
Medical device companies can experience significant setbacks when products in development have problems during clinical trials or fail to win regulatory approvals. Even products that successfully reach the market can face intense competition. It's also possible that the products might cause harm to patients, potentially resulting in litigation that affects the companies' business.
Especially investors with short time horizons and/or low risk-tolerance levels should consider these factors. However, the long-term prospects for the medical device industry generally appear to be very good. Aging demographics and technological innovations should provide nice tailwinds for the medical device sector.
Medical device stocks are often recession-resistant when their products are must-haves for patient care. And while competition can sometimes be intense, regulatory hurdles and high research and development investment costs can create barriers to entry for new competitors. For long-term investors who don't mind the potential for volatility, medical device stocks should provide an attractive opportunity.
Factors to consider when choosing medical device stocks
What should you think about when trying to decide which medical stocks to buy? Here are some key factors to consider:
- Financial strength
- Revenue and earnings growth
- Market share
- Competitive advantages
- Development pipeline
- Valuation
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